North Dakota: “Little Housing Boom on the Prairie”

A booming oil industry in North Dakota has contributed to the state leading the United States in housing growth in 2012:

According to recently released Census data, North Dakota led the nation in housing growth in 2012, increasing its supply of housing by 2.3% in just one year. Overall national growth was 0.3%.

While much of this growth has been focused on the oil patch, the entire state has seen strong economic growth, job creation, and accompanying strength in the housing market. Cities located hours outside the oilfield are reporting shortages of housing and tight markets for existing housing. Shortages of housing have also been reported in small towns throughout the state, as job-seekers move to the region looking to find work in the state’s growing oil and ag industries. A review of the new Census data bears out such reports. North Dakota is home to 8 of the top 100 counties nationwide for housing growth, including 4 of the top 10. Williams and McKenzie County, in the heart of the Bakken development, placed number one and two nationally, respectively, but counties far outside the oil patch also showed strong rates of growth.

The new shift towards more permanent housing construction will probably come as a relief to communities and officials throughout the state, who have been scrambling to find solutions to shortages. While temporary housing for oil workers has boomed throughout the oilfield, local officials have begun to explore limits on such “man camps”, citing their negative effects on local communities, impact on permanent development, strain on infrastructure, and safety concerns. The state has also seen rising rates of homelessness, and faced challenges finding enough workers to fill job openings- often due to lack of places for those interested in moving to the region to work. As estimates of the amount of recoverable oil in the Bakken continue to climb, larger, out of state developers have begun to enter the region, looking to take advantage of what may be a longer, more sustained expansion. With 21,000 job openings currently unfilled statewide and the potential for tens of thousands of wells remaining to be drilled over the next three decades, the pressure for more housing growth to meet the needs of expanding businesses is likely to continue.

It makes sense that housing is following the people and money to North Dakota. But, it is unclear what this means in the bigger picture:

1. Is this housing meant to last, meaning that it is intended to be there 50 years from now when the oil boom may or may not be there? What happens in these communities if these new subdivisions are ghost towns in ten years?

2. Are there any sort of housing innovations in North Dakota? Since this is a unique situation, it seems like a ripe opportunity for some new ideas.

3. Is this housing industry money (real estate, builders, construction jobs) benefiting people in North Dakota or does this involve a lot of out-of-town/state businesses? Growth may often be viewed as solely a good thing but we can also ask who is benefiting from the housing boom.

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